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TransDigm (TDG) Q2 Earnings Beat Estimates, FY19 View Up

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TransDigm Group Incorporated (TDG - Free Report) reported second-quarter fiscal 2019 adjusted earnings of $4.21 per share, which surpassed the Zacks Consensus Estimate of $3.86 by 9%. Moreover, the bottom line increased 11.1 % from $3.79 registered a year ago.
 
Barring one-time items, the company reported GAAP earnings of $3.60 per share compared with $3.63 in the year-ago quarter.
 
Sales
 
Net sales amounted to $1195.9 million, reflecting year-over-year growth of 28.2% from $933.1 million in the prior-year quarter. The reported figure also outpaced the Zacks Consensus Estimate of $1,140 million by 4.9%. Meanwhile, organic sales grew 11%.
 
Acquisitions
 
TransDigm frequently acquires proprietary aerospace businesses with significant aftermarket content, which fortifies its foothold in the core market and is in line with its operating strategies. Evidently, on Mar 14, 2019, the company completed the acquisition of Esterline Technologies Corporation, a supplier of products to the global aerospace and defense industry.
 
We expect TransDigm’s acquisition spree to boost its product range with proprietary products that enjoy strong position on high use of platforms, robust aftermarket content and an excellent reputation.
 
Financial Position
 
TransDigm ended the second quarter of fiscal 2019 with cash and cash equivalents of $2,441.3 million, up from $2,073 million as of Sep 30, 2018. At the end of the reported quarter, the company’s long-term debt summed $16.51 billion, up from $12.5 billion as of Sep 30, 2018.
 
Cash from operating activities amounted to $453 million as of Mar 30, 2019, compared with $453.7 million as of Mar 31, 2018.
 
Transdigm Group Incorporated Price, Consensus and EPS Surprise
 

Transdigm Group Incorporated Price, Consensus and EPS Surprise | Transdigm Group Incorporated Quote

Fiscal 2019 Outlook

TransDigm raised its 2019 financial guidance. Net sales are now anticipated to be $5,395-$5,485 million compared with the prior guidance of $4,145-4,235 million.

EBITDA is anticipated to be $2,325-$2,365 million compared with the prior guidance of $ 2,065-$2,115 million.

Adjusted earnings per share are currently expected to be $16.47-$17.15 compared with $16.42-$17.10 guided earlier.

Zacks Rank
 
Transdigm currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
 
Recent Defense Releases
 
Textron Inc. (TXT - Free Report) reported first-quarter 2019 earnings from continuing operations of 76 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 8.6%.
 
Lockheed Martin Corp. (LMT - Free Report) reported first-quarter 2019 earnings of $5.99 per share, which surpassed the Zacks Consensus Estimate of $4.29 by 39.6%.
 
The Boeing Company (BA - Free Report) reported adjusted earnings of $3.16 per share for first-quarter 2019, which outshined the Zacks Consensus Estimate of $3.11 by 1.6%. 
 
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